Why Twitter Won’t Charge Users

A short while back I wrote about why Twitter had to fundamentally shift its model in order to generate positive cash (not to mention ROI). This should be considered a flat-out given.

Over the past few days, there has been much talk about a couple of recent interviews where Twitter co-founders Evan Williams and Biz Stone have discussed some fairly unique ways that Twitter might make a buck or two (and you can’t begrudge them that). [check out TechCruch’s interview, the NYT’s Bits Blog, TechSassy’s commentary or just search Mashable for “Twitter to charge” for an amazing array of money-making options]

Unfortunately, one of my favorite mottos “Viral info can spread just like a virus – this is good. But beware the mutation of information.”, has proven once again to be all too true. There has been an extremely rapid and (unfairly) anti-Twitter backlash against these reports, such as (all real twits culled from the thousands that I got from a “twitter and “charging” search):

“what? Twitter is going to start charging? As if I’m gonna pay.”

“ok um wow….rumors that twitter is charging $ for making an account?”

“WTF!?!? what is this i hear about Twitter is gona start charging??? shit i stop useing twitter in a heartbeat?! :)”

“just found out that twitter is going to start charging you cats to post up your shit!!! Haha. im glad im not into this at alllllllllllll :)” [ironic how this guy is whacking Twitter posters with his own post…]

But before we all move to condemn Twitter, let’s take a look at some basic givens:

Twitter is smart enough to realize that they have a valuable commodity in their growing number of users.

Twitter is not foolish enough to try to charge rank-and-file users to tweet. It just won’t happen.

Twitter is aware that cash has to come from sources that both have money and are willing to gain access to users. Millions of them.

So, just where will the money come from? Tossing aside all the talk of “reality TV” or some type of “Twitter-in-the-News” type of program (which might add some revenue, but not enough “ad” revenue to satisfy Twitter’s backers), the most likely source is from corporate-sponsored accounts (where corporations actually use Twitter for things like direct sales, marketing and customer support) or from expanded marketing of their API system. Why?

First, advertising (with open APIs) simply will not work. Unless they are willing to close the Twitter API’s down and stop all the Twitter tools out there from accessing Twitter – like my own fav TweetDeck , Tweeters will simply move to alternative interfaces (unless Twitter replicates ALL of these functions in-house ala Facebook). Sure, plenty of users still use the “web” interface, but the existing interface is underpowered and doesn’t do anything for mobile apps (which are lousy handling advertising anyway).

Second, Twitter has already started to tighten up its APIs and has every right to charge for access to “valuable” assets. Sure, this might mean less alternatives, but Twitter deserves to survive as more than just a $55M experiment.

Third, corporations already recognize the fact that they must play nice with social media networks if they want to have a chance to survive and thrive in the future. The challange here, of course, is in coming up with a definition of just who a “corporation” is – especially given the large number of user accounts that have already found a way to make money off of “marketwing” to other Twitter users.

Finally, I just don’t see a viable market for charging “power” users (ala LinkedIn, which relies much more heavily upon a professional user base). If they go that route, it will just make it easier for firms like Facebook or (I hate to say it) Google to replicate the model.

Ultimately, I may be wrong and way off base. But my guess is that all these “free” add-on applications will start to feel the financial crunch and corporations will be charged to create their own “Twitomains” on Twitter. And no, Twitter will not start charging rank-and-file users anytime soon.